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Created with Fabric.js 1.4.5 TNC's responsible globalcitizen or irresponsibleglobal predator? These days everyone is somehow directly connected to a TNC, which stands for 'Transnational Corporation'. From the foods we eat to the electronics we use, nearly all are owned by TNC's- but do they do moreharm than good? Benefits of Multinational Corporations Criticisms of Multinational Corporations Since transnational corporations are so powerful, they can bring somestability to a developing country's economy by Creating wealth and jobsaround the world. Inward investment by multinationals offer much neededforeign currency for developing economies. They also create jobs and helpraise expectations of what is possible by helping these countries to havea strong foundation for their economy as it grows until they can finallybecome less dependent on other countries and organizations.Their size and scale of operation enables them to benefit from economiesof scale enabling lower average costs and prices for consumers. This isparticularly important in industries with very high fixed costs, such ascar manufacture and airlines.Large profits can be used for research & development. For example, oilexploration is costly and risky; this could only be undertaken by a largefirm with significant profit and resources. It is similar for drugmanufacturers.Ensure minimum standards. The success of multinationals is often becauseconsumers like to buy goods and services where they can rely on minimumstandards. i.e. if you visit any country you know that the Starbuckscoffee shop will give something you are fairly familiar with. It may notbe the best coffee in the district, but it wont be the worst. People likethe security of knowing what to expect. Transnational corporations can damage a country tremendously by exploitingtheir workers and their resources through 'slave labour; workers who arepaid a pittance by Western standards. Companies are often interested inprofit at the expense of the consumer. Multinational companies often havemonopoly power which enables them to make excess profit. For example,Shell made profits of $235.4bn AUD last year. This exploitation of workersand resources ensures that the transnationalcorporations save money.When there is no legislation protecting the environment, transnationalcorporations do not have to be as aware of their affects on theenvironment since they will not be penalized for anything that happens.This means that they could be disposing of their waste wherever they wishand contaminating nearby water sources, taking over areas of land that arethe habitats of many other living creatures so they can keep expandingtheir buildings, and there is no limit to how much or what type ofchemicals they are releasing into the air which can cause seriousrespiratory and general health problems and acid precipitation which isdamaging to any ecosystems in the area.Their market dominance makes it difficult for local small firms to thrive.For example, it is argued that big supermarkets are squeezing the marginsof local corner shops leading to less diversity.In developing economies, big multinationals can use their economies ofscale to push local firms out of business.In the pursuit of profit, multinational companies often contribute topollution and use of non renewable resources which is putting theenvironment under threat. Created by Georgia, Tamie and Ilaria
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